Shareholders in Rank Group may be forgiven a sense of deja vu.

Having entered the early 1990s recession carrying too much debt - it had just bought Mecca Bingo - the slimmed-down leisure group is heading into the current downturn in much the same shape. Borrowings are a hefty £215 million, including a £167 million convertible bond, which will be redeemed out of existing banking facilities next month.

The consolation is that, having already coped with the blow of a smoking ban and the scrapping of high-jackpot Section 21 gaming machines, underlying trading is now showing modest signs of improvement against depressed year-on-year comparisons. Today’s year-end update reveals that group like-for-like sales were up 1 per cent over the past 15 weeks, a clear improvement on the 7 per cent decline recorded for the full year. At Mecca, sales are now flat, having been down 15.8 per cent at the half-year stage.

If there is a disappointment it is that trading at Grosvenor Casinos has slowed - reflecting weakness in the provinces rather than London, where sales remain buoyant - as has business at its Blue Square sports betting division. In Spain, poor trading at Top Rank bingo operation was partly offset by the translation effects of a stronger euro.

But tax matters are finally moving in Rank’s favour - notably an agreement with HM Revenue & Customs on non-payment of VAT which will boost bingo profits by around £6 million. Further cost cutting and moderating cost inflation should also underpin profitability.

Rank’s share register is packed with possible trade bidders from Asia, although there is little to reason to believe they will move quickly. However, with Rank’s long losing streak appearing to have waned, at 65p, or 11 times 2009 earnings, there is every reason to hang on.

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